Anglo

London – Anglo American has raised the possibility that it could start buying assets in South Africa, the latest sign of how much has changed in two years, when the miner was focused on selling.

“We no longer have any for sale sign,” Norman Mbazima, deputy chair of Anglo American’s South African unit, said in an interview on Monday. “It is possible to invest in South Africa. We have got hope right now.”

After a collapse in commodity prices in 2015, the mining blue-chip talked about selling assets in South Africa, the home of its biggest diamond, iron ore and platinum mines. While the company sold some coal and platinum mines, that policy is now dead. Some of the mines are now cash cows for Anglo as commodity prices reach multi-year highs.

“We like everything that we are in right now,” he said. “If there are opportunities to expand in those, we would.”

The company said any purchases in South Africa would have to be competitive, and deliver the right return on investment. Still, the mood in South African mining is starting to change after Cyril Ramaphosa was elected to head the ruling African National Congress.

In Davos, Ramaphosa said urgent action is needed to resolve the impasse between government and business over South Africa’s mining charter.

Anglo’s commitment to South Africa will win support from its biggest shareholders. Billionaire mining executive Anil Agarwal called the country an integral part of Anglo. South Africa’s Public Investment Corporation, the second-biggest shareholder, has also long argued for the creation of a domestic mining champion.

“We have no intentions of spinning off Anglo Platinum to a localised company,” Mbazima said of the company’s platinum unit.

Mineral Resources Minister Mosebenzi Zwanehas given platinum major Lonmin the go-ahead to acquire Anglo American Platinum’s (Amplats) 42.5% stake in the Pandora platinum joint venture (JV) operation, which saves the 3 000 jobs that would have been lost had the operation been placed under care and maintenance.

Zwane granted consent for the cession of the right in terms of Section 11 of the Mineral and Petroleum Resources Development Act.

With Lonmin having acquired the remaining 7.5% stake in the Pandora platinum operation from Northam Platinum in May, this acquisition increases Lonmin’s ownership interest in the Pandora JV to 92.5%.

Before the acquisition, the Pandora JV was 50% held by Lonmin subsidiary Eastern Platinum, 42.5% by Amplats through Rustenburg Platinum and 7.5% by Northam, through Mvelaphanda Resources Proprietary.

“One of our primary considerations when assessing [Lonmin’s] application was how we were best going to prevent retrenchments at the time,” noted the Minister in a statement released Wednesday.

“We are indeed pleased that we have been able to save 3 000 jobs, particularly in the current global economic climate.”

Zwane added, however, that Lonmin had five days to issue the Department of Mineral Resources (DMR) with a plan on how it would address broad-based black economic-empowerment compliance at Pandora, as the DMR “cannot afford a situation where transformation is compromised”.

“We are a reasonable regulator and apply our laws consistently to all right-holders. We continue to appeal to right-holders to make use of our open-door policy and engage with us frankly and openly on issues pertaining to this critical sector of our economy. We will always put the interests of South Africa and its people first in all our deliberations,” concluded Zwane.

The Minister’s approval of Lonmin’s application to acquire Amplats’ stake in Pandora comes amidst his proposed moratorium on the granting or renewal of mining and prospecting rights, the granting of mining and prospecting rights renewals, the granting of applications for the transfer of mining and prospecting rights, and the sale and transfer of a majority shareholding in holders of these rights, which has been met with the contempt of the public and civil society organisations, who have dismissed the move as illegal, irrational and unreasonable.

Zwane has essentially proposed that these activities be restricted until the High Court delivers its judgement on the implementation of Mining Charter 3.